The Economic Importance of Peak Oil

Why a Shift to Alternate Energy is Critical

Oil is an essential component to the economy; it runs vehicles and machinery, is a key source of energy, and is the basis of many products derived from petrochemicals including medications, synthetic rubber, plastics, fertilisers and pesticides, and bitumen.

Oil is so essential, in fact, that a change in the oil production and oil demand ratio of as little as -5% is enough to send oil prices skyrocketing. A change of -15% is enough to ruin an oil-based economy. That negative drop in the production and demand ratio is precisely what the effect of peak oil will be when it happens.

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